The recent implementation of Ethereum’s Cancun-Deneb upgrade, specifically the introduction of EIP-4844, has sparked discussions on the scalability and potential fee reductions of Layer 2 (L2) solutions. While some view this upgrade as a significant step forward, veteran cryptocurrency technologist Eric Wall offers a more cautious perspective, pointing out potential limitations in achieving “dirt cheap” transaction fees on Ethereum L2s after the Dencun activation.
Eric Wall, a well-known figure in the cryptocurrency tech community, has emphasized that despite the advancements brought by EIP-4844, certain design aspects of L2 sequencers could still result in fee spikes under specific conditions. Wall advises against overestimating the scalability improvements, noting that even with the maximum capacity of blobspace, L2 rollups after Dencun would likely only scale to 100-1,000 transactions per second (TPS).
He emphasizes that reaching the maximum theoretical capacity does not guarantee consistently low fees, especially in situations of increased network stress, such as extreme buying pressure.
Since the implementation of the Dencun upgrade on March 13, various Ethereum L2 networks have experienced noticeable changes in fee dynamics. According to data from the L2Fees tracker, prominent L2 solutions like Optimism, Arbitrum, Starknet, and zkSync Era have seen significant reductions in transfer and cross-asset swap fees, dropping below $0.01 equivalent. However, some networks like Loopring, zkSync Lite, and Boba Network have shown minimal fee changes, indicating that not all L2s were equally affected by the Dencun-triggered optimizations.
The fee reductions observed in dominant L2 networks after the Dencun activation have implications for Ethereum’s scalability and usability. Lower transaction costs make Ethereum’s L2 solutions more attractive, potentially drawing in more users and applications to the ecosystem. Additionally, reduced fees could enable microtransactions and support novel use cases that were previously hindered by high gas costs.
Despite these positive developments, Eric Wall’s cautious stance serves as a reminder of the complex challenges involved in scaling blockchain networks. While fee reductions are a welcome improvement, they do not eliminate the possibility of fee spikes under certain conditions. Wall’s analysis underscores the importance of ongoing research and optimization efforts to effectively address scalability concerns.
As Ethereum continues to evolve, it is crucial to focus on optimizing network performance and addressing scalability concerns to ensure its long-term success.